Abbey Protection To Be Bought By Markel Unit For GBP 116.5 Mln; Shares Down

(RTTNews) - Shares of Abbey Protection Plc (ABB.L) declined around 6 percent in the morning trade after the specialist insurance and consultancy company announced Wednesday that it has agreed to be acquired by a unit of U.S.-based financial holding company Markel Corp. (MKL)

Abbey and Markel Capital Holdings Ltd. have reached agreement on the terms of a recommended cash acquisition, under which each Abbey shareholders will be entitled to receive 115 pence in cash. The deal values the entire issued and to be issued share capital of Abbey at approximately 116.5 million pounds.

In addition, Abbey shareholders as of September 13 will be entitled to receive the interim dividend of 2.4 pence per Abbey share as announced on September 4, which will be payable on October 10.

The sale follows Abbey Board's review of the strategic options for the business. According to the firm, a sale to Markel is the best strategic option for the company and its employees and is in the best interests of all its shareholders.

Abbey said its Directors consider the terms of the deal to be fair and reasonable. Abbey noted that Markel has confirmed that it will not increase the transaction price and that this is its full and final offer. The deal is intended to be implemented by way of a scheme of arrangement, which will become effective in January 2014, subject to conditions.

Following the deal closure, Abbey will be managed by Markel's London-based unit Markel International, which writes insurance and reinsurance business through eight divisions. The companies expect that Abbey provides a complementary fit with Markel International for providing legal and taxation related professional fees insurance products and services for UK small to medium sized enterprises.

Abbey noted that Markel has received irrevocable undertakings or letters of intent from its shareholders in respect of a total of 66.99 million shares, representing, in aggregate, approximately 67 percent stake.

William Stovin of Markel International said, "It's our expectation that Abbey Protection will continue to operate under its own successful brand, while our capital and risk appetite will enable it to retain more underwriting risk and to explore growth initiatives currently beyond its reach. Abbey Protection will be a significant addition to our UK retail business."

In London, Abbey shares are currently trading at 113.05 pence, down 6.70 pence or 5.59 percent.

Markel shares closed Tuesday's trading at $514.95, down $3.32 or 0.64 percent.